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Harley Davidson Preparing For The Next Century Case Solution

Solution Id Length Case Author Case Publisher
1759 1888 Words (9 Pages) Richard L. Nolan, Suresh Kotha Harvard Business School : 906410
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Harley Davidson (HD) is one of the leading motorcycle brands in the world with massive brand recognition; however, according to the case (Nolan and Kotha), it faces several issues that need to be resolved. Firstly, the competitors are quicker to understand the changing market dynamics and untapped market segments. The companies like Honda, Yamaha, and Suzuki have successfully introduced lower-priced, lighter and faster motorbikes, which are the winner.

Secondly, HD is more targeted towards boomers, which makes it less appealing for younger generations. This is why HD has to close Buell line and sell MV Augusta brand. There is a huge potential in sports, and standard motorbikes market but all attempts of HD to tap into those markets have been unsuccessful.

Following questions are answered in this case study solution

  1. Issues

  2. Problem Statement

  3. External Analysis

  4. Internal Analysis 

  5. Value Chain Analysis

  6. Alternative Strategies 

  7. Recommended Strategy

  8. Implementation    

Case Analysis for Harley Davidson Preparing For The Next Century

2. Problem Statement

All the issues lead to a major problem:

“HD has been moved into a niche which is making it difficult to enter new segments and different target market”. 

This is a problem because even though current sales are good, they are slowing down in the future. Lower sales in the main segment will cause problems for the company. Moreover, the main target market is ageing, and the brand is unpopular in younger generations. Similarly, competitors have a stronghold in other segments of the market by providing quality bikes at lower prices.

3. External Analysis

In order to come up with strategies to solve identified problems, external and internal analysis is imperative. If we look at the external environment of HD, we can summarize it in the following manner:

5 Forces


Threat of Competition


Buyer Power


Supplier Power


Threat of Substitutes


Threat of New entrants


Table 1: Porter's 5 forces

The motorcycle industry is highly competitive due to many reasons. Firstly, there are a lot of competing firms from big giants such as Honda and Yamaha to smaller local firms. Secondly, the substitutes available to customers are numerous such as cars and public transport. Moving on, the power of customers in the industry is strong because there are many substitutes available to them. Moreover, the cost of switching between the substitutes is moderate, which makes it easy for customers to switch. Similarly, the industry is very open to buyers feeding them with information and seeking valuable input from them, so they are a strong pillar.

The power of suppliers is weak because they are small in scale compared to the manufacturing giants; hence, there are low chances of forward integration. Similarly, the number of suppliers in the industry is high, so they are under pressure to satisfy the manufacturers and prevent them from switching. The threat of substitutes (other means of transport) for HD is moderate because even though there are a lot of alternatives available but the core customers of HD (heavy bike riders) will not shift to those alternatives as they do not find them appealing. Lastly, the threat of new entrants is moderate as even though the customers can switch to other brands the cost of building a brand is very high, and the new firm might have difficulty in achieving the economies of scale.

4. Internal Analysis 

The internal analysis is presented in the table below: 




Costly to imitate?

Exploited by the firm?

Economic Implication?

Competitive Implication?

Buyer circle

Yes, because the customer community is co-creating goods

Yes, because the company has a very outstanding bond with its customers

Yes, it is tough to copy the kind of commitment and drive of the community

Acknowledged but not fully exploited

Increases profits

Provides edge over competitors

Ease in the availability of crucial Raw-material for accurate execution

Yes, the Material-as-needed (MAN) program results in marked productivity improvement

Yes, it gives HD dominance in the market over competitor

No, it can be easily copied by the competitors


Reduces tied up cash and cuts costs of  production and maintenance dramatically

Gives a sustainable competitive edge

Brand recognition

Yes, it is very valuable

Yes, it is one of the top brands in the market

Yes, needs a large budget

Yes, HD has made use of its brand awareness in times of need

Increases new product success chances

Gives a sustainable competitive edge

Finance availability

Yes, especially for strategy implementation


No, external funding options are available to other companies as well

HD has sustainable monetary standing

Cost of financing increases

Provides temporary edge

Brand positioning compared to rivals


No, all competitor strive to position their brand well

Yes, it can be emulated by rivals but needs a huge marketing budget

Yes, the brand is positioned on the basis of  lifestyle and attitude

Gives the higher market share

Provides temporary edge

Options in E-Commerce with current IT abilities

Yes, E-Commerce is the present, and the future and HD can grip the opportunities

No, all the competitors are aware of its potential and are financing the options

Yes, the Artificial Intelligence (AI) and in-house analytics are not easy to copy

No, HD is currently not exploiting it but in the future, it definitely can

High initial investment but can cut costs and improve profitability

Can give a sustainable edge in the future

Marketing prowess in the company

Yes, competition in the industry is on the grounds of product differentiation too

No, all the companies are aware of marketing tactics and its significance

No, pricing is matched in competitive pricing

Yes, HD takes full advantage of marketing capabilities available

Increases marketing costs and market share

Provides temporary edge

Relationship with Retailers and wholesalers

Yes, it strengthens the value-chain


No, but slightly difficult

Yes, it has been exploited over the years, for example, the Rider's Edge and Rental Programs

Cut costs and increase profits

Gives sustainable edge

Ability in attracting experts

Yes, they add significant value




Cost increases

Gives a powerful advantage

Table 2: VRIO Table

5. Value Chain Analysis

Value Chain analysis will allow to identify how certain activities play a role in adding or reducing value in the overall business. This will allow us to find out what impact each activity has on HD. The 5 primary activities of the company are:

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